Another old example of a good climactic event and push through AR point, which I believe is an ideal setup
1hr chart - price dropped to 50-61.8 fib zone and high volume rejection
You would go long on the 5min chart after the push through the AR point with a stop 5 pips below the AR box (aggressive) or 5 pips below the low point (non-aggressive). At the 50-61.8 fib level, I would have moved SL to below AR point (Non-Aggressive) or BE (aggressive) until it broke the 50-61.8 fib, then again when it broke 50-61.8, I’d move stop on both to 5 pips below the 50-61.8 level and watch the trade for high volume activity indicating SM selling into the move (time to take profits)
I have looked to find my most perfect trade identified, on 14th January 2011, but cannot locate the pic at the moment. Huge volume on the AU at about 1.02 and it went all the way to 1.08 before signalling to get out. Massive trade, and one I showed Petefader on the day
Perfect example on current charts. have a look at EU currently. Easy to spot the climactic candle and then the events afterwards.
Prior to this, high volume on the lows, then climactic event and heavily sold off. Guess who had the sell positions in their pocket right at the end??
Hi Everyone,
Excellent site! I am starting to get the hang of using volume to determine turning points, using the Tradeguider MT4 plugin.
One excellent feature this has are the H-stops - stops based on volume and very useful for placing stops as the trend progresses. Once a bar closes beyond one of these H-stops, its a sign to look out for a change…or indeed a continuation, if price closes back in the trend direction. I hope this chart will explain.
Also, I find the last highest volume spike, draw a line across the top and bottom and wait for price to close either above or below those lines. But, if that closure is right at a support or resistance level…beware, price could bounce back into the area between the high/low lines and may break out to the other side.
As price reverses down on 4th Jan, the H-stops follow price nicely down. On the 6th price closes above the H-stop during the Asia session, indicating a possible direction change. Price is supported at the long H-stop towards noon, then makes its move up. H-stops following nicely as it goes up.
Notice how I’ve drawn horizontal lines at H & L of big volume bars. When price closes above or below these bars it USUALLY (no certainties in trading:-)) signals the direction of movement, with the opposite horizontal line as the stop.
You will notice that price does very occasionally spike through a red h-stop, then continues as it should…but that’s life:5:
